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Delays force foreign investors to pull out of power projects

Foreign investors including Ogden Energy, Cogentrix, Daewoo Power, Mirant and Electricite De France have pulled out of various power projects due to delays in achieving financial closure, Lok Sabha was informed on Thursday.

"Inability of the state electricity boards to provide adequate payment security to the private sector power projects has been one of the main reasons due to which these projects could not achieve financial closure in spite of progressing well on other fronts," Minister of State for Power Jayawanti Mehta said in a written reply.

Detailing the projects deserted by foreign investors, she said S Kumars' promoted 400-mw Maheshwar Hydro Power Project in Madhya Pradesh had seen US power utility Pacgen withdrawing in 1998, German power majors Bayomwerk and Vew in 1998 and Ogden Energy of US in August 2001.

While Cogentrix Energy withdrew from Mangalore Power Company in February 2000, Ogden Energy exited from the 420-mw Bakreshwar Thermal Project in West Bengal, she said.

Daewoo Power terminated its 1070-mw Korba East Thermal Project citing inability of Madhya Pradesh Electricity Board to provide payment security, she said adding Mirant Asia Pacific withdrew from 6x660 mw Hiram Thermal Power Project stating that key milestones for activities relating to payment security mechanism, fuel supply agreement, and transmission services agreement had not been met.

Mirant walked out of the 500-mw Balagarh project in West Bengal citing poor financial health while French major EDF pulled out of the 1082-mw Bhadrawati Thermal Power Project due to lack of escrow agreement, Mehta added.

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